The GVDS 3.0 Financial Report
… or what happened when I started asking for an entry fee.
I agonized and worried for nearly three months.
Up until the start of registration for the 3rd Global Virtual Design Sprint (GVDS) last November, I was debating whether or not to take an entry fee from those who joined the event.
I had been doing everything for free since I had started the GVDS, and I preferred doing it that way. I didn’t want to convey the idea that I was building up something special just to quickly monetize my audience for personal gain.
When you start doing that, people quickly figure out that full of sh*t.
The Hidden Cost of “Free”
When I did my first major Global Virtual Design Sprint last April, I purposely branded it as a grand experiment to test the appeal of virtual design sprints. I needed to know if the core concepts I had been pounding the table about were viable, desirable and easily understood.
Logistically, that April event was a nightmare.
Since participants weren’t obligated to devote any time or attention to a free event, their options were wide open. They were free to ignore any schedule I proposed, blow off any sessions I scheduled, and bail at the first sign of trouble during their Sprint week.
It was worse for those who were genuinely interested in the event and had made plans to participate. Teams I had initially assigned with 8, 9 or 12 people would slowly melt away to nothing in the final two weeks before the GVDS began.
In fact, over *half* of the 320+ people who signed up for the GVDS either didn’t show or cancelled in the week before their sprint. I was changing and
modifying the lineups of proposed sprint teams on a daily, if not hourly basis. It consumed any spare time I had planned for other aspects of the event I wanted to put more time into (making reusable templates, instructional videos, live Q&A sessions, etc.)
In the end, the event was fairly successful for both myself and those who participated. It generated a lot of buzz, started the conversation about virtual design sprinting, and prompted questions on where it could go next.
But I knew… it couldn’t survive as an altruistic endeavor for the long term.
I needed a different model to work from.
You can’t feed your family on testimonials
The overall effort put into the GVDS just wasn’t going to be sustainable unless I could somehow transform this newly acquired ‘expensive hobby’ into something my family could back me on.
More importantly, I needed to know if there was a resemblance of a business model buried in the mix. Would people pay a fee for this experience? Would they come back looking for something else? How could I best serve those who wanted to try this process out?
Here’s what I decided to roll with, and how the financials turned out overall.
1. Pricing Structure
The first order of business was to figure out how much I wanted to charge. After a bit of internal deliberation, I went with a common pricing model used for most events, combined with a very conservative fee structure to keep barriers to entry low.
- Early Bird Fee ($59)
- Regular registration ($99)
- Late registration ($299)
That last number was purposefully inflated to defer last minute additions. I wanted to put my full attention on the event, and adding new registrations late in the game was an experience from April that I wanted to temper.
2. The Financials
Here’s a small snapshot of a chart that shows how everything worked out.
Some initial observations and additional reference:
- Transaction fees for money transfer were slightly more expensive with PayPal, but they weren’t that bad.
- I was shocked at the zero fee sums for Transferwise. I’m sold.
- The “Misc Revenue” in the Stripe row refers to the first $50 transaction as a test. I didn’t go back and ask for the extra $9. 😁
- Both the early bird/referral and regular fee ratio were inline with where I thought they would be.
- Refunds were very low. I feared this would be an outcome for a lot more people for any number of reasons.
- A handful of people paid their entry fee but did not take part in the event.
- These numbers don’t take into an account one person who still has to pay (via Transferwise) and another who got a free ride in the GVDS (long story, and I wouldn’t want to bother you with it.)
3. The Rest of the Story
Nearly 9k for a first try at a paid event? Not bad! That number would clearly work if I had a full time job and needed a side hustle to keep things interesting and/or wanted to pursue something meaningful.
Now, let’s apply some additional dynamics to the mix:
- Since I have an LLC (Dallas Design Sprints) attached to the GVDS brand, I have to deduct self-employment tax (15.3%, or $1320.50) from that revenue number. That brings the total down to $7367.
- Let’s also add the costs of doing business and drive that revenue number down a little.
- Zoom Webinar for GVDS Presents and GVDS Showcase ($40 per month for 3 months = $120)
- GVDS logo work and related media = $250
- Zoom, Typeform, Bonjoro to connect, send surveys and video greetings, respectfully ($30 + $35 + $20 each month for three months = $255
- Grand subtotal: $7367 minus $625 = $6742
- If I were to take a conservative average of the hours I spent for the entire 12 weeks of the event, it would total to 480 hours (12 weeks multiplied by 40 hours). That means I generated about $14 per hour working on the GVDS.
- Without getting too much into specifics (because I would bore you to tears), the monthly average of the total revenue ($6742) comes out to $2247 (or $27k per year). It’s something, but it’s not much.
What should I change for GVDS 4 in 2020?
Given that all the information I’ve provided above is accurate, and I’m looking to organically grow the Global Virtual Design Sprint out for a longer term engagement, what would you change about the event?
- Would you change the pricing structure? If so, how would you adjust/change the GVDS to accommodate a new one?
- How would you expand the event to include sponsors, guest facilitators, non-profits and commercial companies?
- What would you change to make sure the event kept its promise of putting practitioners in the spotlight while creating meaningful work and projects for the social good?
Whatever your answers may be, dear reader, I’d be honored to get some of your perspective.
Feel free to post your thoughts here on Medium, send me a direct message on LinkedIn, or reach out on our Virtual Design Sprints Slack channel and start a conversation there.
Hope to hear from you! 👍